Fewer Michigan residents are enrolling in health insurance through the Affordable Care Act, which loses its Obama-era penalty next year for individuals who fail to buy insurance.
There were 293,940 Michigan sign-ups on the Healthcare.gov exchange for 2018 individual and family plans, down nearly 9% from last year, according to federal figures, which showed nationwide sign-ups down 5%.
Overall, roughly 6% of all Michigan residents get insurance through these types of health plans.
The recent decline followed a shorter open enrollment period for the insurance plans that ran from Nov. 1 to Dec. 15, or half as long as in previous years. The Trump administration also spent less money on marketing the enrollment period and helping people sign up.
And prices for the insurance coverage saw a massive jump.
In Michigan, the average price for an individual plan this year skyrocketed a record 26.9%. A portion of that increase resulted from the administration’s decision to halt payments to insurance companies for a type of subsidy.
Nearly 90% of Michiganders who buy coverage through the exchange are somewhat insulated from these price hikes because they get federal ACA subsidies. That means taxpayers foot most of the bill for the higher premiums.
Still, there are tens of thousands who earn too much to qualify for the subsidies and must pay full sticker price – or skip health insurance.
Some policy experts were surprised that Michigan’s enrollment figures didn’t drop more this year, considering the higher premiums and factors that made signing up less convenient.
“It’s really pretty good from what we had anticipated,” said Marianne Udow-Phillips, executive director of the Center for Healthcare Research & Transformation in Ann Arbor.
This year is also the last year that people will face a tax penalty under the Affordable Care Act, commonly called Obamacare, if they opt to go without health insurance.
The penalty – currently 2.5% of household income or $695 per adult, whichever is higher – gets zeroed out beginning in 2019 under the federal tax overhaul that passedin December.
The IRS is still expected to enforce the Obamacare penalties this year, even though the penalties are on their way out, said Gordon Mermin, senior research associate at the Urban-Brookings Tax Policy Center in Washington.
The IRS has warned that it won’t process income tax returns that do not disclose the filer’s health insurance status.
“The latest from the IRS is they fully intend to enforce the mandate,” Mermin said.
The coming elimination of the penalty is expected to put more upward pressure in 2019 on the cost of insurance. That is because fewer healthy individuals are expected to buy coverage if they aren’t forced to, leaving insurance pools with a greater percentage of sicker people.
“People are predicting that rates will go up even more than they did this year,” Udow-Phillips said.
Overall, the percentage of Michiganders without health insurance fell to 5.4% in 2016 from 11% in 2013, the last year before the ACA took full effect and the Republican-controlled state legislature’s expansion of Medicaid eligibility, according to U.S. Census Bureau data.